Worker shortage driving up home renovation costs, with no end in sight

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The shortage of skilled trades workers in the London region has caught up with the home renovation business, driving prices up by more than 30 per cent since the pandemic hit, industry insiders say.

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Demand for contractors, already high amid strong housing construction in London, went through the roof at the start of the COVID-19 pandemic when many people, unable to spend their money on leisure activities such as family vacations, turned to home renovation projects.

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Peder Madson, owner of CCR Build and Remodel, estimates calls from potential clients – following the initial shock to business caused by the COVID-induced lockdowns – doubled in the first few months of the pandemic in 2020 and continued well into 2021.

All that extra demand, coupled with supply chain issues caused by the pandemic, caused the price of construction materials to skyrocket and increased the need for more labour.

“Costs had been on the rise prior to COVID but, with the pandemic, everything got exacerbated, first with materials, then with the trades and especially the trades,” Madson said.

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“If you ever need to find new trades (workers), it will be very difficult but with COVID, it will become next to impossible.

“So, there was all this work out there, but we just couldn’t take it on because there weren’t the workers to do it,” Madson said.

Since those highs, the costs of materials have leveled off.

But the shortage of trades people continues to be a barrier keeping prices up, for both renovation jobs and new home construction.

“A lot of it concerns the fact that everybody’s having to pay their employees more in order to keep them,” said Mark Malouin, partner at Duo Building Ltd.

Malouin estimates projects that would cost about $65,000 just a few years ago can cost upwards of $90,000 today.

“It’s a huge increase,” Malouin said.

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Across the London region, only 10.2 per cent of London’s labor force in 2021 had relevant credentials to work in the trades — apprenticeship or non-apprenticeship trades certificates and diplomas – according to Statistics Canada. That compares to 16.1 per cent in 2006.

That figure becomes more problematic when looking at younger Londoners, with the percentage of workers between the ages of 25 and 29 with such credentials sitting at 5.7 per cent in 2021, down from 13.1 per cent 15 years ago.

Unless those trends are reversed, especially as London aims to build 47,000 homes in the next decade, prices will remain elevated, both Malouin and Madson agreed.

“Labor seems to be the big driver and I still don’t see many new trades coming online,” Madson said.

“I cannot see that part of the project costs are going down.”

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